KEY POINTS:
The late-summer surge in the super-heated housing market was yesterday greeted with resignation by economists who predicted another interest rate increase next week.
Real Estate Institute sales figures showed a $13,000 jump in average Auckland sale prices in one month - rises of more than $400 a day.
The Auckland median sale price of $430,000 in February climbed to $443,000 last month, although some individual suburban results were patchy.
Prices fluctuate because of fewer sales or several lower-priced sales in one period.
But overall, the national median climbed by $8500, from $335,000 to $343,500. The number of sales rose from 9357 deals in February to 10,989 last month.
Goldman Sachs JBWere research director Shamubeel Eaqub said the extremely strong market was certain to prompt the Reserve Bank to raise its official cash rate next Thursday.
ANZ's economic review said the latest jump might have been caused by people deciding to buy sooner, rather than later, and avoid any further interest rate rises.
The bank said it was surprised by the continuing strength of the figures.
The number of days it took to sell a house reduced, from 30 days in February to 28 on average last month. ANZ said this meant the market was again approaching the records set in 2003 when the number of days it took to sell fell because of extremely strong demand.
Westpac's Doug Steel said the market was "hot" and predicted prices would continue rising.
"Elevated sales and lower days to sell suggest more upside to prices in the short term, keeping intense heat on the Reserve Bank," Steel said.
ASB spokesman Nick Tuffley said the new housing figures made an interest rate rise even more likely.
Real Estate Institute president Murray Cleland said buyers appeared unfazed by rising interest rates.
"Both the Auckland market and the national market overall are clearly not prepared to be subdued by the official cash rate increase," he said.
"As a savings medium, the residential property market is currently hard to beat and as much as the popular focus is on the cost of a mortgage, the fact is that homeowners have enjoyed a significant increase in the equity in their homes in recent times which is feeding through into our economic prosperity," Mr Cleland said.
The BNZ's chief economist, Tony Alexander, challenged those who claimed prices were too high.
"Many people describe the current level of house prices as ridiculous with the implication that some day they are going to correct strongly downward.
"This is very unlikely, and while we don't think one can run through all the relevant factors to generate an accurate forecast of where house prices are going to go, we can look at key price drivers and conclude that house prices might be exactly where they should be."
High immigration, low interest rates, an extremely high level of job security, high employment rates and rising building costs were some of the reasons prices would not tumble.
